Further to information shared with you at the beginning of this month, we would like to give you an update on the Airfreight situation, but we are also looking at the potential issues and contingency plans for Ocean freight.

Airfreight :

There is a continued increase in passenger flight cancellations due to the SARS (severe acute respiratory syndrome) crisis. So far the decrease in capacity has been equaled by a decrease in demand. Our airfreight operations have not been greatly effected, although on some Intra-Asian routes there has been some upward cost pressure.

If airline capacity slashing continues and airfreight capacity tightens, freight capacity on some sectors could become an issue. We shall continue to monitor the situation, if you have any questions or concerns, please do not hesitate to contact your local DHL Danzas Air & Ocean representative.

Ocean freight :

In general our ocean freight operations have not been impacted. Business continues as usual at all ports in the Asia Pacific region.

North China: There has been no impact on North China Ports or carriers so far.

Singapore: All vessels entering the Singapore Port must furnish a detailed health declaration form for all crew, 12 hours before arrival. The Port of Singapore Authority (PSA) will be operating 24 hours a day and there will be no disruption in operations for cargo ships.

As part of the SARS contingency plan, P&O Nedlloyd (PONL), NYK Line and Hyundai (HMM) have already moved part of their operations to Tuas, Jurong.

Singapore's oceanfreight team and our multinational gateway staff have moved to a different location in Keppel Distripark and will continue to operate from there until the epidemic is over.

Hong Kong: Hapag Lloyd shared some of their views and comments with us on the port situations in Hong Kong and South China.

1. What will the impact be on capacity if any port terminal in Asia shuts down?

We would stress that this scenario is highly unlikely, and in fact almost improbable. Should a major port, such as Yantian or Hong Kong, be closed we could realistically expect a major disruption but only for a short period of time.

It would be extremely doubtful that any closure would last more than three days, which would provide ample time for disinfection of any contaminated areas. During this time, there could be other possibilities depending on the port involved, such as diversion to another port, or shipment from a feeder port to connect to a different hub port.

2. Will the carriers choose to by-pass the port for a quarantine period?

If a port is closed it may be by-passed, depending on volume. However, for large volume ports such as Hong Kong or Yantian, we would expect that any temporary closure would result in vessel delays.

3. What happens if SARS case is identified on the vessel while in-transit?

If a crew member is suspected of contracting SARS, they will be treated at the next available port. If an outbreak of SARS is confirmed it would be expected that the port authorities would detain the vessel for Quarantine and disinfections for a period of approximately three days.

However, we would again stress that as most Asian countries have now stopped allowing the crew members to disembark and go to areas with SARS problems, or vessels coming from SARS areas, we anticipate that the chances of such an incident are low.

As well as keeping you informed about the general situation of SARS in Asia and the measures / contingency plans DHL Danzas Air & Ocean Asia-Pacific are implementing, we will continue to issue regular updates concerning our airfreight and oceanfreight operations.

Should you have any questions or concerns regarding the above, please do not hesitate to contact your local DHL Danzas representative.